City needs to work with DEQ on Terminal 1 homeless shelter

The Oregon Department of Environmental Quality has written the City of Portland to say the warehouse at Terminal 1 is not approved for a homeless shelter, as proposed by Commissioner Dan Saltzman.

The Aug. 8 letters from DEQ Project Engineer Erin McDonnell says her agency assumed the property would remain industrial when the Port of Portland sold it to the Bureau of Environmental Service. It was cleaned up to industrial but not residential standards at the time.

"The risk assessment performed would need to be looked into if site uses were to change and whether an urban residential exposure would be appropriate without additional work," reads the letter to BES, which says the city must work with DEQ regarding any changes.

The council is scheduled to consider it on Aug.10. Mayor Charlie Hales and Commissioner Steve Novick have expressed support for the proposal, giving it the votes to pass.

Saltzman is proposing the shelter open Nov. 1. No estimates on the cost of the conversion have been released.

The 15 acres immediately south of Terminal 1 were sold by the port to a private developer at the same time. After a delay caused by the Great Recession, that parcel was purchased and is being redeveloped as residential buildings by Fore Properties.

Vice President Lee Novak says his company has spent millions of dollars removing and disposing of contaminated soil on the property to meet DEQs higher residential standards. Two projects, Waterline and Riverscape, have been completed, while a third, Rivage currently is under construction.

We have removed tens of thousands of cubic yards of soil to comply with the residential requirements, says Novak, who admits his company is concerned about the possibility of a large homeless shelter opening next door to its developments.

Under the housing state of emergency, which the City Council declared last October, the city supposedly can waive a number of building and zoning requirements to create new homeless shelters and affordable housing projects. It is unclear whether the city can waive state environmental regulations, however.

Saltzman, Fish spar over cost

In the meantime, nearby residents and business owners discussed their concerns during last weeks National Night Out gathering at the Riverscape Condos and Townhouses, just blocks from the proposed shelter location.

Some said they would testify against the proposal, but worried it was already a done deal, despite not having been contacted by anyone in the city about it.

Also last week, Saltzman and Commissioner Nick Fish, who opposes the idea, disagreed over how much it should cost. Fish oversees the Bureau of Environmental Services, which owns the 14-acre property at 2400 N.W. Front Ave. that includes the 96,000-square-foot warehouse that Saltzman wants to use as a shelter.

Saltzman wants BES to lease the site to the Portland Housing Bureau for $10,000 a month, which is how much it charged Nike to use the warehouse for indoor track events earlier this year. But Fishs office says the market value of the property has since been determined, and it is much higher  up to $1.2 million a year if rented out, according to a recent determination by a real estate broker, based in part on two new leases for portions of the property.

According to an email from Fishs office, the broker, Colliers International, is helping BES sell the property, which has been declared surplus. The email says the lease value of the warehouse alone is $33,600 a month, with surrounding areas adding additional value. Fish says the Portland Housing Bureau must pay market value for the lease, because the property was purchased with sewer ratepayer funds.

But Fish actually wants to complete the sale process, which has been underway for months. The property is zoned for industrial uses, and he believes it will sell for millions of dollars that can be used to reduce future sewer rate increases. Fish also says a new industrial owner will create good-paying jobs at the property.

Portland currently has a shortage of industrial land, especially along waterfront sites like Terminal 1. The city bought the outdated marine terminal from the Port of Portland to be used as a staging ground for the Big Pipe project, a $1.3 billion effort to prevent untreated sewage from spilling into the Willamette River and Columbia Slough. It is included in the citys inventory of industrial lands, which was used to complete the Comprehensive Plan update approved by the council in June.

Portland will have a problem if it takes Terminal 1 out of the inventory, says Bill Wyatt, the ports executive director.

Business group sayswait for bids

Saltzman says the city will not need to do that immediately, even if the council approves using Terminal 1 for a homeless shelter this week. His proposal only calls for the warehouse to be used as a shelter for six months, with the option of extending it another 12 months.

Doing it temporarily is intended to give developer Homer Williams time to raise millions of dollars from the private sector to transform the site into a multiservice homeless facility, modeled after one he visited in San Antonio, Texas. Only then would the council have to decide whether to change the zoning for Terminal 1, Saltzman says.

Last Thursday, the Portland Business Alliance said the council should wait until the period for accepting bids on Terminal 1 expires before making any decisions. Bids are being accepted until Aug. 15 under the surplus property process, and they will not be made public until then.

In an Aug. 4 letter to Saltzman, the PBA said it understands the need to provide more shelter for the homeless and also to create good-paying jobs on industrial properties. The business membership organization said that if one or more viable bids are received for Terminal 1, BES should sell it. If no bids are received, however, the group suggested the warehouse should be used as a temporary shelter.

But the PBA also believes there are more suitable locations for a permanent homeless multiservice center in the area, and urged that a complete inventory of all unused public properties be completed as soon as possible.